Which loan should I choose at the bank and what loan should I choose? In the case of cash loans we borrow shortly and relatively small amounts of money. But is it always the cheapest?
Money from bank loans and loans is used for the purchase of home appliances and electronics, home renovation or holidays. Some borrow to pay off other loans. We do not always lend rationally and “with the head”. We often follow the impulse and the momentary need. This is not always a cash loan in the bank – we often use loan companies’ offers, paying very high loan costs.
WHAT IS CREDIT AND LOAN?
Of course, both terms refer to borrowing money and are used interchangeably, but they mean really different financial products. There are several differences and that is essential. Pursuant to Polish law, the loan may only be granted by banks and Credit Unions. Banks operate on the basis of banking law, and Credit Unions base their activity on the act on cooperative savings and credit unions. All these institutions are subject to the Polish Financial Supervision Authority (KNF), which is why it is easy to check their credibility and lending money in these institutions is safe.
The contract should be concluded in writing and specify in particular: the parties to the contract; the amount and currency of the loan; the purpose for which the loan is granted; the rules and date of loan repayment; the interest rate on the loan and the terms of its change; the amount of commission, if the contract provides it; the method of securing loan repayment; the scope of the bank’s rights related to the credit use and repayment control; the dates and manner of making cash available to the borrower; conditions for making changes and terminating the contract.
Loans may be granted not only by banks and credit unions, but also by non-banking institutions (popular loan companies via the Internet and landlines) and private individuals. Issues related to the loan are therefore not regulated by the Banking Law, but by the Civil Code. The loan agreement should be concluded in writing, if the loan amount exceeds PLN 1,000. There is no need to determine the amount of interest, the repayment date or the purpose for which the money will be spent. Do not be naïve, however. Each lender specifies exactly in the contract the terms of the loan: interest rate, how many commissions and additional fees, duration, loan security. A repayment schedule is also included.
The most popular bank loans
The issue of choosing the right loan or loan is crucial when it comes to credit costs. We should start our search for the best offer by specifying which banking products we will use, and then we must compare the loan offers. In the case of cash loans and cash loans, you can use the help of a comparison of cash loans and mortgages.
Loan cash loan A loan or cash loan in a bank is usually given for a relatively short period of time.
We borrow the majority of loans or cash loans for a period not longer than 5 years and for amounts up to PLN 10,000. A loan or loan may be granted for a statement, a certificate of obtained income, and for larger amounts, collateral is required, e.g. by promissory note or third party guarantee.
Housing mortgage loan This is a long-term loan with high values, intended for the purchase of real estate (the housing loan indicates specifically that the purpose for which we want to allocate it is the purchase of a flat). The collateral is a mortgage on the lending property.
Consolidation loan consolidation loans, the repayment of bank liabilities (credits and loans) to other, larger loan, so. consolidation loan. You can check the latest offer of consolidation loans here. We then have only one loan, which allows a significant reduction in the amount of loan installments. Consolidation loans are often called (but unfortunately mistakenly) debt relief loans.
Other bank loans
Car loan Most often, it is intended for the purchase of a new or used car, but it can also be used to finance the purchase of other movable property. The collateral for car loans is partial ownership (the vehicle is owned by the bank in 49%, and in 51% by the borrower), a registered pledge (entitling the bank to satisfy claims from a credited car), assignment of rights with AC.
A mortgage loan As with mortgage loans, real estate is a collateral, but it is a loan, so it can be used for any purpose. The property may belong to the borrower as well as to a third party who is the guarantor of the loan.
Account credit Also known as a revolving loan or “overdraft”. We can use the credit limit granted when the funds on your account run out. Each deposit on the account reduces the debt, and interest is charged only on the loan amount used.
Credit card Similarly as in a revolving loan, the bank grants a credit limit up to which we can make ourselves indebted. There is an interest-free period here, which means that when we repay the debt in this period (usually it is 50-60 days), we will not pay interest. The credit card is used for non-cash transactions.
WHAT CREDIT TO CHOOSE IN THE BANK
So what is the credit now? In the case of a short loan period and for a small amount, you can consider debit in an account or by credit card. This should be a cheaper solution. At high loan values, eg a cash loan of PLN 40,000, we can consider a mortgage loan. Certainly it will be more beneficial than a cash loan, otherwise the loan period will be longer than 10 years.
When searching for loans, you can use loan comparison websites to get acquainted with bank offers. However, no comparison engine should be treated as the choice of the cheapest loan.